The economic environment of both the beef and pork industries has changed. Capacity utilization for both beef and pork has a significant impact on margins and the market impact goes beyond supply and demand.
Beef packer margins jumped into the black last week while cattle feeders saw their margins improve $88 per head, according to the Sterling Beef Profit Tracker.
Beef packer profit margins continued to grow last week as the beef cutout jumped nearly $5 per cwt. and cash fed cattle prices declined another $2 per cwt.
Cattle feeding margins were unchanged from the previous week, which means the train wreck continues. Despite modest gains in the cash market, cattle feeders lost an average of $206 per head, just $1 better than the previous week.
Beef cutout prices trended about $2.80 per cwt. higher to $256.37, and packer margins improved more than $26 per head, resulting in losses of $15 on every animal processed.
Beef packers put away the red ink last week as they turned modest profits on every animal processed. Feedyard margins, however, slipped a little further away from positive.